Water Street Labs, LLC received designated contract market status from the Commodity Futures Trading Commission on Thursday, clearing the way for a new CFTC-regulated event contracts exchange in the US. The exchange will operate on a proprietary trading platform called the WSL Direct System.
Water Street appears connected to BGC Group, the global brokerage and financial technology company. Waterstreetlabs.com redirects to CX Markets, and Water Street’s filings indicate it plans to clear through CX Clearinghouse. Both CX entities sit within the BGC corporate family.
BGC’s FMX Futures Exchange currently offers weather event contracts through its CX Division, suggesting Water Street Labs could represent an expansion of that business rather than an unrelated new entrant. DeFi Rate has reached out to BGC for comment and will update this article with any response.
CFTC lists Water Street as approved DCM
The CFTC published the order of designation for Water Street on July 16, following submission of documents that stretched back to December 2025. The rulebook suggests that futures contracts, including EFPs, will be a significant focus of the exchange.
In the designation order, the CFTC stated that Water Street is authorized to offer trading of “fully collateralized futures and swaps on a two-sided central limit order book, and a parimutuel single-sided auction.” That trading will take place on Water Street’s proprietary platform, WSL Direct, per the rulebook.
That platform could be a point of differentiation for Water Street Lab’s exchange, as one of the exhibits submitted to the CFTC calls for confidential treatment of the algorithms and systems that WSL Direct contains. At this juncture, there is little that is publicly known about this emergent designated contract market (DCM).
The exchange was originally designated in 2010 as Cantor Futures Exchange, which pursued real-money box office futures after Cantor Fitzgerald acquired the Hollywood Stock Exchange. The CFTC approved a box office contract that year before Congress banned the products.
Water Street Labs has not announced launch timing, contract categories, or how its markets will relate to the existing CX weather products.
Prediction market exchange options surging
Water Street Lab’s designation follows the CFTC approval of Optex Markets by a matter of days. Meanwhile, Camila Grigera Naón of Fortune has reported that the company behind another competitor, Pascal, has closed on a $9 million Series A funding round.
The challenges for new exchanges will include disrupting trader habits and differentiating their products. Pascal plans to do so by offering more competitive fees according to Naon and Optex could carve out its space by sticking to financial derivatives rather than competing directly with brands like Kalshi in the event contract space.
Water Street Labs has not announced launch timing, contract categories, or how its markets will relate to the existing CX weather products.
WSL Direct licensing may be the focus for Water Street
Rather than taking on the industry behemoth of Kalshi directly, Water Street might instead be in the business of helping others do so. Water Street could sell access to WSL Direct as the platform that other exchanges use to offer contracts.
Such relationships are not uncommon, with DKeX (formerly DraftKings Predictions) routing its trades through the CME Group’s platform prior to launching its proprietary system. Another possibility in this situation is that Water Street could run its own DCM as a proof-of-concept with the ambition to make the majority of its revenue from licensing deals.
Regardless of what the company’s ambitions for the future are, the CFTC designation is now in the rearview mirror. The result of that could be that US residents will have another exchange option in the near future.
